Eastern European Economics: “It Is A Thrill To Overcome These Challenges”

Eastern Europe is very diverse territory when it comes to the state of its live entertainment industry. Pollstar takes a look at the state of business in a few countries, from small to large.

– Scene From Sziget
With a crowd of 500,000 people during one week, it is Eastern Europe

The journey starts in Romania, which just hosted the first East European Music Conference in Sibiu and another conference called Mastering The Music Business in its capital Bucharest. The live entertainment professionals working in the country are eager to learn from their colleagues, who’ve had more time to hone their craft. The Romanian Revolution that freed the country from communism isn’t even 30 years old, so private enterprise has had less time to grow experiene.

Emagic’s Guido Janssens lives and promotes concerts in Romania. He’s also one of the founders of Awake Festival, which premiered in 2017 and attracted some 20,000 people to its first edition. He said, “Romania being on ‘far Eastern’ part of Eastern Europe and having a very poor road infrastructure, makes ‘big productions’ think twice (or not at all!) about bringing their expensive tour that far out.”

– Awake Festival 2017
The premiere attracted some 20,000 visitors

“And if they do,” he continued, “we usually end up paying higher guarantees than our colleagues in Western Europe (while purchasing power in Romania is less than half that of most Western European countries).”

The region lacks decent venue infrastructure. The only concert arena in the whole of Romania is BT Arena in Cluj-Napoca with a capacity of some 10,000 . “We have none such venue in the capital, Bucharest; still the location with the highest buying power,” said Janssens.

He added that “it is obviously very difficult to permanently hire people if you can involve them in only three or four shows on a yearly basis to work on.” Emagic, considered one of the big players in the Romanian live market, did only three events in Romania in 2017: Depeche Mode at the soccer stadium Cluj (45,000 capacity), Sting at BT Arena Cluj (10,000) and the debut edition of Awake. “On smaller events with a capacity of 2,000-4,000 there’s hardly any money to be made,” Janssens said.

What is more, the Romanian government makes it hard for entrepreneurs to employ people. 

“A net salary of 4,000 ron ($1,000) costs the employer 7,000 ron ($1,800). Cost of employment is high and that’s why we’re facing a lot of competition from colleagues that pay their people cash, i.e. without papers,” he explained.

The state makes life for promoters hard in another way, by promoting free festivals financed with tax-money “to boost their (political) image” – an offering no private promoter can compete with.

Another Eastern European professional, who has worked for some of the region’s biggest events but asked to remain anonymous, told Pollstar, that comparatively low wages were a big part of what kept the market from growing.

“Just imagine me, working for a big festival as an international director for many years and earning two to three times less than some of my agents working in the Western part of Europe (yes, I do have some insight in this case). Well, the more internationally connected you are, the more it will start to bother you.”

He added that, “Yes, part of life is still cheaper in the East, but only part of it: services (due to lower wages, so a classic catch-22) and real estate (although prices are going up all the time). But clothes, cars, iPhones, etc. – and let’s not forget big international acts – cost the same here as anywhere else. Taxes are also as high as in the West.

“The other side of the scale, i.e. how much work you have to do for this lower salary is at least as heavy as anywhere else. I’m saying ‘at least’ because working on markets where the domestic buying power is as low as in the East means you have to work harder, give more, provide something extra to stay alive, and take this time/energy away from your family.”

According to this source, the other part of the problem was HR-policy related. 

“Caring about your employees, not just via proper salaries, but also with other ways that will educate and motivate them to stay loyal, is still not a top priority in our industry. And, let’s face it, not just in our industry. Well, HR actions cost money and we arrive at the same problem, but I guess it’s a two-way process: as long as there’s always new workforce to do the job under these given conditions why should anything change?

“Well, it just doesn’t feel good to be a ‘cheap Eastern European workforce’, even though it’s still a lot better than being unemployed.”

Pia Klancar – MENT Ljubljana
Won two European Festival Awards this year

Eastern Europe is not a homogeneous market. 

“You can hardly compare a huge and vibrant Polish market, to let’s say the Macedonian, Estonian or Romanian,” said Matjaz Mancek, music program manager of Kino Siska and manager and booking director of MENT Ljubljana. MENT has quickly developed a reputation as one of Europe’s insider tips. Only in its fourth year, the showcase festival snatched two European Festival Awards this year, for Best Indoor Festival and Best Small Festival.

Mancek said, “there are challenges everywhere, but it is a thrill to overcome these challenges and to develop our own way.

“Yes, it is hard also in our market for a private company to survive only on music business, especially if it wants to keep the quality of programming high. That is why a constructive public sector engagement and funding is necessary to a certain extent. Our cultural institution [Kino Siska] can maintain a high quality program because of a solid background of public funding, which we are also using to help build a more professional music industry environment, and open up opportunities for young artists.”

One of the countries that has ceased to be an emerging market over the past ten years is Poland.

Mikolaj Ziolkowski, of Alter Art, the promoter of the country’s largest festivals Open’er, Orange Warsaw and Krakow Live, said, “it’s a stable, regular market in terms of value and capacity, with great potential to grow.” The festivals matched international standards in terms of headliners, infrastructure and capacity, according to Ziolkowski.

Open’er 2018 is headlined by Bruno Mars, Depeche Mode, Arctic Monkeys and Gorillaz. “What can you say? It’s one of the biggest lineups in Europe, and it has been for years.” The Rolling Stones are going to conclude their “No Filter” tour in the National Stadium of the country’s capital Warsaw’s, July 8. Tickets for the tour are priced quite high, but sold-out as quickly in Poland as in any other market.

“It’s a booming economy,” Ziolkowski said. “Poland is a smaller market than the UK or Germany, but it’s bigger than many other European markets.”

“Regarding the festivals, it’s developing quite well everywhere,” Ziolkowski said, adding that Eastern Europe was becoming a regular part of the touring schedules of the main festival acts. Slovakia for instance, which is a comparatively small country, hosts the 30,000 capacity Pohoda Festival. The Chemical Brothers, St. Vincent, Jamie Cullum, Ziggy Marley, Glass Animals and Jessie Ware lead the lineup of the next edition, July 5-7. 

Alex R. Elms – Open’er
120,000 festivalgoers experienced the 2017 edition